Analyzing World Acceptance (NASDAQ:WRLD) and American Express (NYSE:AXP)

American Express (NYSE:AXP) and World Acceptance (NASDAQ:WRLD) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, earnings, dividends, profitability, analyst recommendations, valuation and risk.

Profitability

This table compares American Express and World Acceptance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Express	15.07%	34.12%	3.77%
World Acceptance	6.71%	12.13%	4.00%

Volatility & Risk

American Express has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500. Comparatively, World Acceptance has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500.

Institutional & Insider Ownership

84.3% of American Express shares are owned by institutional investors. Comparatively, 83.6% of World Acceptance shares are owned by institutional investors. 0.1% of American Express shares are owned by company insiders. Comparatively, 38.0% of World Acceptance shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations for American Express and World Acceptance, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Express	1	10	12	1	2.54
World Acceptance	0	2	0	0	2.00

American Express presently has a consensus target price of $373.32, suggesting a potential upside of 14.48%. Given American Express’ stronger consensus rating and higher possible upside, research analysts plainly believe American Express is more favorable than World Acceptance.

Valuation and Earnings

This table compares American Express and World Acceptance”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Express	$72.23 billion	3.05	$10.83 billion	$16.48	19.79
World Acceptance	$585.74 million	1.52	$34.59 million	$8.46	22.52

American Express has higher revenue and earnings than World Acceptance. American Express is trading at a lower price-to-earnings ratio than World Acceptance, indicating that it is currently the more affordable of the two stocks.

Summary

American Express beats World Acceptance on 11 of the 15 factors compared between the two stocks.

About American Express

American Express Company, together with its subsidiaries, operates as integrated payments company in the United States, Europe, the Middle East and Africa, the Asia Pacific, Australia, New Zealand, Latin America, Canada, the Caribbean, and Internationally. It operates through four segments: U.S. Consumer Services, Commercial Services, International Card Services, and Global Merchant and Network Services. The company’s products and services include credit card, charge card, banking, and other payment and financing products; network services; expense management products and services; and travel and lifestyle services. It also provides merchant acquisition and processing, servicing and settlement, point-of-sale marketing, and information products and services for merchants; and fraud prevention services, as well as the design and operation of customer loyalty programs. In addition, the company operates lounges at airports under Centurion Lounge brand name. It sells its products and services to consumers, small businesses, mid-sized companies, and large corporations through mobile and online applications, affiliate marketing, customer referral programs, third-party service providers and business partners, direct mail, telephone, in-house sales teams, and direct response advertising. American Express Company was founded in 1850 and is headquartered in New York, New York.

About World Acceptance

World Acceptance Corporation engages in consumer finance business in the United States. The company provides short-term small installment loans, medium-term larger installment loans, related credit insurance, and ancillary products and services to individuals. It offers income tax return preparation and filing services; and automobile club memberships. It serves individuals with limited access to other sources of consumer credit, such as banks, credit unions, other consumer finance businesses, and credit card lenders. World Acceptance Corporation was founded in 1962 and is headquartered in Greenville, South Carolina.